SAN FRANCISCO (08/08/2000) - Two weeks after beating analyst estimates in its second-quarter earnings report, NBCi has laid off about 170 employees, or 20 percent of its staff, according to sources within the company.
The layoffs come about four months after the company hired a new CEO, Will Lansing, from retail giant Federated (FD) Department Stores.
"NBCi is in the midst of some cost-cutting initiatives," says company spokesman Robert Silverman. He added that the company announced "three or four weeks ago" that it would be implementing such efforts, though layoffs were not specifically mentioned at that time.
Since its formation in November from the merger of portal Snap.com, direct marketer Xoom.com and a collection of NBC properties, the company had grown rapidly through acquisitions, including VideoSeeker.com and AllBusiness.com, to about 880 employees.
"(NBCi) expanded much more than they had anticipated," explains a manager who was laid off and requested anonymity. "They told us that surplus jobs that weren't necessary were being eliminated. We have until the close of business [today] to take whatever we need and leave."
Among the layoffs were middle-management positions in marketing, business development and accounting, according to sources within the company.
Two months ago, NBCi announced plans to relaunch its various properties under a unified brand, a daunting and risky undertaking. Former employees say impatience with those efforts, against the backdrop of a dismal stock price, has already driven dozens of staffers from the company.
An NBCi spokesperson denies there's been attrition. "We've been growing at a very healthy clip."
NBCi reported a net loss of $49.5 million, or 81 cents a share, in its second-quarter earnings report two weeks ago, beating analyst expectations of a net loss of 85 cents a share. But the news did little to reverse the company's downward trajectory on the Nasdaq. NBCi's stock price has plunged from a 52-week high of $106.13 in January to $9.31 late last month. Shares closed today at $11.